5 Ways Behavioral Segmentation Software Boosts Revenue with Minimal Investment

5 Ways Behavioral Segmentation Software Boosts Revenue with Minimal Investment

Behavioral segmentation software can enrich your marketing strategy by making it easy to identify customer groups based on buying patterns, brand interactions, content consumption, and other signals. It requires data—and lots of it—to work correctly. Once segments are defined and created, marketers can better plan and launch highly targeted campaigns, content, messaging, and offers.

The benefits of advanced segmentation software

Advanced behavioral segmentation creates more engaging experiences for customers because it focuses on relevance—showing customers offers and information that will be much more likely to resonate with them. 

But, how do you create these advanced segments in a cost-effective way? That’s where behavioral segmentation software can make a big impact. Benefits of investing in segmentation tools include:

  • Improved personalization: Behavioral customer segmentation software simplifies the process of personalizing your marketing messages and improving customer engagement.
  • Better budget allocation: Identifying and segmenting the customers most likely to spend money with you allows you to allocate your budget more effectively.
  • Reliable forecasting: Analyzing each segment’s patterns helps you identify trends and more effectively plan marketing, outreach, and retention strategies. 
  • Increased loyalty/brand advocacy: Customers want (and expect) personalized experiences and relevant content, according to McKinsey. Delivering on this expectation can reduce customer acquisition costs by up to 50%. 
  • Better product development: Behavioral segmentation software can help you identify and prioritize areas to focus on, and gaps to fill in product development.
  • Increased conversion rates: By targeting the right audience with the right message, behavioral segmentation can help increase conversion rates.

How Do You Stack Up Against the Competition?

Monetate’s eCommerce benchmarks cover a wide range of metrics, including conversion rates, AOV, bounce rates, and more. Check out our portal and see how you compare.

Woman in glasses thinking

Behavior segmentation in action

Let’s look at a brief behavioral segmentation example: As part of their marketing strategy, a beauty and bath products retailer might use behavioral segmentation variables  — like how often a customer buys shampoo, how much they typically spend, and the fragrances they prefer —to create targeted  email campaigns. They could promote specific product sales to different segments, or display similar products to browsing customers. (e.g., “since you liked this, you might love this”).

5 ways to leverage behavioral segmentation software to boost revenue 

1. Identify high-value segments 

High-value segments are the customers who impact your business the most (e.g., generate the most revenue, bring in more business, buy repeatedly, etc.). They’re the people who buy more often, spend more money, and return frequently. Identifying this segment (or segments) allows you to understand them better, so you can create content, offers, and strategies that resonate with them. 

Catering to high-value customers can turn them into brand advocates and inspire them to recommend you to their friends and peers. It can also help you develop strategies to attract more customers like them. 

2. Track ROI Closely

According to a recent survey by CWJobs, less than a third of IT decision makers are satisfied with their employees’ ability to use the new tech they invest in. That’s why it’s so important to track the ROI of your behavioral segmentation tools and processes closely.

Creating key performance indicators (KPIs) to track success is one way to do this (e.g., track revenue, total sales, customer acquisition costs, and customer retention rates). Once you’ve established your KPIs, you can work to achieve maximum ROI through continuous improvement by identifying engaged users and  targeting them with more tailored content.

3. Optimize marketing campaigns by segment 

Behavioral segments allow you to create and optimize your marketing campaigns by tailoring your messaging, content, and offers based on segment preferences, historical purchasing behavior, and more. 

This not only increases the chances of conversion, it reduces the cost of acquisition since precise targeting means less waste when it comes to ad spending. It also allows you to shift gears when a campaign or strategy isn’t working, reducing time (and money) wasted on poor performing campaigns.

4. Leverage AI to streamline behavioral segmentation

AI streamlines the process of behavioral segmentation by automating data collection and analysis. AI can also use predictive analytics and real-time decision-making to further optimize customer segmentation. It lets marketers, sales associates, and other team members spend less time on costly, time-intensive processes, like data entry and manual segmentation, so they can focus on more meaningful work. AI-driven segmentation can also improve the accuracy and effectiveness of customer segmentation since it reduces one of the biggest causes of poor data quality—human error.

5. Integrate existing systems

Integrating behavioral segmentation software with existing systems helps boost revenue since it requires less investment to achieve advanced segmentation. That’s because you don’t need to overhaul your entire tech stack to realize the benefits of effective segmentation.

Look for tools that are compatible with common CRM and marketing automation platforms and can facilitate seamless data transfer and synchronization. Integrating your different customer data sources into one unified ecosystem can reduce potential legal costs by keeping customer data more secure. 

Affordably boost revenue with behavioral segmentation software

It’s possible to use advanced behavioral segmentation techniques to boost revenue without a huge investment in new technology. The key is to find behavioral segmentation software that reliably unifies your customer data, automates the process of creating high-value segments, and enables you to leverage AI to streamline data collection, analysis, and segmentation tasks.

By taking the time to evaluate what you need, developing KPIs to measure success, and implementing a pilot program prior to full adoption, you can further reduce costs. The best way to boost revenue with any technology is to make sure it’s a good fit for your organization. That means it should integrate with existing tools and adapt as you scale.

How to choose the right segmentation software vendor

As with any new tech investment, it’s important to assess your needs and budget so you can pinpoint behavioral segmentation software that meets both. When evaluating vendors, consider reputation and expertise within your industry and market sector. Interviewing a vendor’s clients (past and present) and reviewing case studies can help you identify solutions that may or may not be a match for your organization. 

Great support is key. Look for vendors who can provide responsive customer support and a clear roadmap for future development. They should be able to scale as you scale. Once you select a behavioral segmentation provider, we recommend starting with a pilot project. This lets you test the tool’s effectiveness with a specific use case before adopting it fully.